Identity Trust Transformed: New Research Indicates Increased Identity Verification and Authentication Processes Drive Strong Return on Investment

LexisNexis Risk Solutions and Forrester Consulting published research examining the current state and challenges of identity verification (IDV) and authentication solutions and how those processes become increasingly critical in a post-pandemic world. The research highlights how businesses can manage these activities in a way that produces benefits for both the business and consumer.

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The report found that companies rank identity verification as highly important for maintaining customer relationships, security practices, fraud prevention and brand reputation with businesses seeking more accurate and holistic IDV coverage to improve process accuracy and achieve optimal fraud control across channels.

Organizations are eager to confidently manage and support consumers while decreasing security threats and building trust, particularly during a time of digital transformation accelerated by the pandemic. IDV processes are essential in creating a strong, low friction customer experience. Sixty four percent of respondents said the pandemic increased or significantly increased the importance of their IDV and authentication processes and 71% increased prioritization of customer experience.

The research confirms that organizations are aware of the increase in potential fraud caused by the expansion of online consumer activity and in response are prioritizing the importance of identity management. Eighty six percent of survey respondents say their organization plans to evolve their IDV processes within the next 12 months by making investments to increase the number of risk signals, be better prepared for emerging fraud threats and improve customer experience.

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Forrester’s Key Recommendations for Identity Management Decision Makers:

• Use a combination of technologies for additional risk signals and more accurate results – No single technology will typically provide total protection against all types of fraud. Organizations report that they often procure and use multiple verification methods for a more enjoyable customer experience and greater fraud protection. Greater market consolidation has now made it easier for organizations to source multiple IDV technologies from fewer vendors.

• Deploy IDV methods to protect all channels – Respondents say that IDV during customer onboarding must uniformly cover all major channels, including online desktop and mobile web, native mobile applications, interactions with chatbot/intelligent agents and contact centers.

• Ensure teams actively monitor emerging threats and fraud typologies – Firms must proactively update fraud detection models and actively research new fraud patterns such as synthetic identity fraud, bots, account takeover, etc., to react quickly to emerging threats. The use of cloud-based fraud management and IDV services can help as it greatly reduces the need to constantly update the IDV solution’s threats and fraud insights.

• Constantly measure the effectiveness of machine learning models – The survey shows that successful IDV solutions increasingly use machine learning models. Risk scoring models should consistently maintain and improve key performance indicators (KPIs) to stop fraud and perform IDV processes more cost effectively and in a way that is least disruptive to the customer experience.

“Forrester’s survey findings give us a better understanding of how our customers and other companies around the world are adapting to the new normal of the digital economy,” said Kimberly Sutherland, vice president of fraud and identity strategy at LexisNexis Risk Solutions. “Companies rely on strong identity verification and authentication to create the trusted experience that their customers expect.

“The past year of the pandemic only served to accelerate the existing online activity trend,” Sutherland continued. “Many organizations have committed to strengthening their fraud prevention policies, but those that have not risk getting left behind, resulting in poor consumer interactions and decreased revenue. The right solutions layered together builds a tighter web for optimal fraud prevention. This survey definitively concludes that combining both physical and digital identity attributes can transform the way businesses engage in commerce.”